GSTSECTORAL SERIES

MSME

Directorate General of Taxpayer Services

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received the assent of the hon’ble President of India
and were enacted on 30.08.2018.These amendments
™‹ŽŽ„‡ƒ†‡‡ơ‡…–‹˜‡™Š‡ƒŽŽ–ƒ–‡•’ƒ••–Š‡
 Introduction: What is MSME? In accordance with the
Act amendments in their respective SGST Acts.
In its 29th meeting held on 04.08.2018, it was decided
by the GST Council to form a Group of Ministers
(GoM) for MSMEs which would identify the measures
to be taken to provide a conducive environment
for the growth of MSMEs after examining the
recommendations of the Law Committee, the
GST for MSME Sector
provision of Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006 the Micro, Small
ƒ†‡†‹—–‡”’”‹•‡•ȋȌƒ”‡…Žƒ••‹Ƥ‡†‹–™‘
classes:
(1) Manufacturing Enterprises: The enterprises
engaged in the manufacture or production of
‰‘‘†• ’‡”–ƒ‹‹‰ –‘ ƒ› ‹†—•–”› •’‡…‹Ƥ‡† ‹ –Š‡
Fitment Committee and the IT Committee on the
representations and suggestions relating to the
MSME sector received from various stakeholders.
Conclusion:
The micro, small and medium enterprises
ȋ•Ȍ •‡…–‘” ‹• ‘ˆ •’‡…‹ƒŽ •‹‰‹Ƥ…ƒ…‡ ˆ‘” –Š‡
Ƥ”•– •…Š‡†—Ž‡ –‘ –Š‡ †—•–”‹‡• ‡˜‡Ž‘’‡– ƒ†
RegulationAct1951or employing plant and machinery
‹ –Š‡ ’”‘…‡•• ‘ˆ ˜ƒŽ—‡ ƒ††‹–‹‘ –‘ –Š‡ ƤƒŽ ’”‘†—…–
having a distinct name or character or use. The
ƒ—ˆƒ…–—”‹‰ –‡”’”‹•‡• ƒ”‡ †‡Ƥ‡† ‹ –‡”• ‘ˆ
‹˜‡•–‡– ‹ Žƒ– ƒ† ƒ…Š‹‡”›Ǥ• ‘–‹Ƥ‡† ˜‹†‡
S.O. 1642(E) dated 29th September 2006 issued by the
Ministry of MSME, Government of India, New Delhi,
†‹ƒ
‘˜‡”‡–Ǥ – ‹• ‡š’‡…–‡† –‘ ‘ơ‡” Š‹‰Š‡” Micro Enterprises is an enterprise where investment
employment opportunities by 2020. In line with the
commitment to MSME sector, certain relaxations
have already been implemented for them.
As MSMEs become accustomed to a larger compliance
climate, a better level of preparedness and discipline
in conducting business will gradually be a part of
their operation. With the Government’s commitment
to strengthen MSMEs on all fronts including GST,
it is expected that the current challenges would
be stabilized and the industry will gradually take a
’‘•‹–‹˜‡–—”–‘ˆ—ŽƤŽŽ–Š‡ƒ–‹‘ǯ•˜‹•‹‘•Ǥ
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‹ ’Žƒ– ƒ† ƒ…Š‹‡”› †‘‡• ‘– ‡š…‡‡† –™‡–›ǦƤ˜‡
lakhs rupees; Small Enterprise is an enterprise where
investment in plant and machinery is more than
–™‡–›ǦƤ˜‡ ŽƒŠ• ”—’‡‡• „—– †‘‡• ‘– ‡š…‡‡† Ƥ˜‡
crore rupees; Medium Enterprises is an enterprise
where investment in plant and machinery is more
–ŠƒƤ˜‡…”‘”‡”—’‡‡•„—–†‘‡•‘–‡š…‡‡†–‡…”‘”‡
rupees.
(2) Service Enterprises: The enterprises engaged
‹ ’”‘˜‹†‹‰ ‘” ”‡†‡”‹‰ ‘ˆ •‡”˜‹…‡• ƒ”‡ †‡Ƥ‡† ‹
terms of investment in equipment. For service sector,
the prescribed investment in equipment for Micro,
Small and Medium Enterprises should be less than
Rs. 10 lakhs, between Rs. 10 lakhs to Rs. 2 crores and
between Rs. 2 crores to Rs. 5 crores respectively.
Š‡ • •‡…–‘” …‘–”‹„—–‡ •‹‰‹Ƥ…ƒ–Ž› –‘ –Š‡
national economy and is the largest employment
provider besides being a breeding ground for
entrepreneurship and skill development. The
number of MSMEs is more than 30 million providing
1
employment toaround 100 million people. Out of this,
micro enterprises are around 90%, small enterprises
are around 9% while the number of medium enterprises
is less than 1%. Inspite of having the potential and
inherent capabilities to grow, MSMEs in India have
been facing a number of problems like sub-optimal
scale of operations, technological obsolescence,
•—’’Ž› …Šƒ‹ ‹‡ƥ…‹‡…‹‡•ǡ ‹…”‡ƒ•‹‰ †‘‡•–‹…
and global competition, fund shortages, change in
manufacturing strategies and turbulent and uncertain
market scenario. To survive in such a scenario and
compete with large and global enterprises, MSMEs
need to be supported and assisted to ensure sustained
growth and development in the existing competitive
arena. It is understood that the cost of compliance
in terms of statutory laws is proportionately much
higher for MSMEs vis-à-vis the bigger companies.
Š‡”‡ˆ‘”‡ǡ •‘‡ ”‡Žƒšƒ–‹‘ „‡‡Ƥ–• ƒ”‡ ‡…‡••ƒ”›
in order to help them cope with sudden increase /
change in compliance challenges.
Accordingly, with GST in place, the Micro, Small and
Medium Enterprises have been accorded with a lot
‘ˆ „‡‡Ƥ–• ‹ –‡”• ‘ˆ …‘’Ž‹ƒ…‡ ”‡Ž‹‡ˆ• ‰‹˜‡ ‹
the form of threshold exemptions, Composition levy
•…Š‡‡ǡ“—ƒ”–‡”Ž›ƤŽ‹‰‘ˆ–Š‡
”‡–—”•–‘‡–‹‘ following:
a few. While doing so, it has also been kept in mind
that they do not become uncompetitive and are also
‰‹˜‡ƒŽŽ–Š‡„‡‡Ƥ–•‘ˆ
Ǥ Schedule III;
‘’Ž‹ƒ…‡‡‡Ƥ–•ˆ‘”•—†‡”
ǣ having seating capacity of more than thirteen
As a trade facilitation measure based on turnover,
following Micro, Small and Medium enterprises are
not required to obtain GST registration:
(i)Persons involved in intra – State taxable supply of
goods or services or both, if his aggregate turnover in
ƒƤƒ…‹ƒŽ›‡ƒ”†‘‡•‘–‡š…‡‡†’”‡•…”‹„‡†ƒ‘—–‘ˆ
threshold exemption limit i.e. Rs. 20 lakhs(Rs. 10 lakhs
in case of the special category states of Nagaland,
Manipur, Mizoram and Tripura).
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(h) registered persons would be allowed to issue
consolidated credit/debit notes in respect of multiple
invoices issued in a Financial Year
ȋ‹Ȍƒ‘—–‘ˆ’”‡Ǧ†‡’‘•‹–’ƒ›ƒ„Ž‡ˆ‘”ƤŽ‹‰‘ˆƒ’’‡ƒŽ
under the CGST Act, 2017 before the Appellate
Authority and the Appellate Tribunal to be capped at
Rs. 25 crores and Rs. 50 crores, respectively.
(j) Commissioner to be empowered to extend the time
limit for return of inputs and capital sent on job work,
upto a period of one year and two years, respectively.
(k) supply of services to qualify as exports, even
if payment is received in Indian Rupees, where
permitted by the RBI
(l) place of supply in case of job work of any treatment
or process done on goods temporarily imported into
India and then exported without putting them to any
other use in India, to be outside India.
(m) scope of input tax credit is being widened, and
it would now be made available in respect of the
ȋ‹Ȍ‘•–‘ˆ–Š‡ƒ…–‹˜‹–‹‡•‘”–”ƒ•ƒ…–‹‘••’‡…‹Ƥ‡†‹
(ii) motor vehicles for transportation of persons
(including driver), vessels and aircraft;
(iii) services of general insurance, repair and
maintenance in respect of motor vehicles, vessels and
aircraft on which credit is available; and
(iv) goods or services which are obligatory for an
employer to provide to its employees, under any law
for the time being in force.
The recommended amendments have been introduced
and passed by the Lok Sabha on 09.08.2018. The same
and sub-section (4) of section 7 of the Union territory
Goods and Services Tax Act, 2017 (UTGST Act, 2017)
have been amended for empowering the Government
to notify a class of persons who would be liable to pay
–ƒš —†‡” ”‡˜‡”•‡ …Šƒ”‰‡ ™‹–Š ”‡•’‡…– –‘ •’‡…‹Ƥ‡†
categories of goods or services or both. As of now,
the said provisions have been suspended for the CGST
Act, IGST Act and the UTGST Act till 30.09.2019 vide
‘–‹Ƥ…ƒ–‹‘ ‘Ǥ ͖͖Ȁ͖͔͕͜Ǧ‡–”ƒŽ ƒš ȋƒ–‡Ȍ †ƒ–‡†
06.08.2018, 23/2018-Integrated Tax (Rate) dated
06.08.2018 and 22/2018-Union Territory Tax (Rate)
dated 06.08.2018 respectively.
ȋ…Ȍ ‘’–‹‘ ˆ‘” “—ƒ”–‡”Ž› ƤŽ‹‰ ‘ˆ ”‡–—”• —†‡”
 Composition levy scheme:Composition levy scheme in
would be introduced for taxpayers having annual
–—”‘˜‡” —’–‘ • ͙ …”‘”‡• ‹ –Š‡ ’”‡˜‹‘—• Ƥƒ…‹ƒŽ
year. Further, provisions in law would be amended to
‹–”‘†—…‡ƒ‡™ƒ†•‹’Ž‡”‡–—”ƤŽ‹‰•›•–‡ǤŠ‡
new formats have been put in the public domain for
stakeholder consultation. The proposed new return
ƤŽ‹‰•›•–‡ƒŽ•‘‡˜‹•ƒ‰‡•„ƒ•‡†ƤŽ‹‰‘ˆƒ‹Ž
return and a single page return per tax period for
certain taxpayers.
(d) threshold exemption limit for registration in
the States of Assam, Arunachal Pradesh, Himachal
Pradesh, Meghalaya, Sikkim and Uttarakhand is to be
increased to Rs. 20 lakhs from Rs. 10 lakhs.
(e) allowing taxpayers to opt for multiple registrations
ˆ‘”†‹ơ‡”‡–’Žƒ…‡•‘ˆ„—•‹‡••™‹–Š‹–Š‡•ƒ‡–ƒ–‡
or Union territory.
(f) mandatory registration would be required only
for those e-commerce operators who are required to
collect tax at source under section 52 of the CGST Act,
2017.
(g) temporary suspension of registration would
be allowed while proceedings of cancellation of
registration are underway
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(ii) Persons involved in inter – State taxable supply of
services only (not goods), if his aggregate turnover in
ƒƤƒ…‹ƒŽ›‡ƒ”†‘‡•‘–‡š…‡‡†’”‡•…”‹„‡†ƒ‘—–‘ˆ
threshold exemption limit i.e. Rs. 20 lakhs (Rs. 10 lakhs
in case of the special category states of Nagaland,
Manipur, Mizoram and Tripura).
For inter-state suppliers of goods, registration under
GST is a compulsory, even if their aggregate turnover
‹ƒƤƒ…‹ƒŽ›‡ƒ”†‘‡•‘–‡š…‡‡†–Š‡–Š”‡•Š‘Ž†Ž‹‹–
GST is an alternative method of levy of tax designed
for micro, small and medium taxpayers whose
turnover is upto the prescribed limit. It is very simple,
hassle free compliance scheme for small taxpayers. It
is a voluntary and optional scheme. A person opting
to pay tax under composition levy scheme can neither
take input tax credit nor it can collect any tax from
the recipient. The salient features of composition levy
scheme are:
(i) A registered taxable person, whose aggregate
turnover does not exceed Rs. One Crore (Rs. 75
lakh for special category States except J & K and
––ƒ”ƒŠƒ†Ȍ‹–Š‡’”‡…‡†‹‰Ƥƒ…‹ƒŽ›‡ƒ”ƒ›‘’–
for this scheme.
(ii) Composition levy scheme is available for registered
taxable person making supplies (aggregate turnover)
upto Rs. One Crore (Rs. 75 lakh for special category
States except J & K and Uttrakhand) during current
Ƥƒ…‹ƒŽ›‡ƒ”Ǥ
(iii) A supplier of services, except a person engaged
in supply of restaurant service,is currently not eligible
for composition levy scheme.
(iv) Ice cream, pan masala and tobacco manufacturers
3
cannot opt for the GST composition levy scheme.
(v) A taxpayer registered under composition levy
•…Š‡‡Šƒ•–‘’ƒ›ƒƒ‘—–‡“—ƒŽ–‘…‡”–ƒ‹Ƥš‡†
percentage of his taxable turnover as tax to the
government. The rate of tax under composition levy
scheme is 1% for eligible manufactures and traders and
5% for eligible service providers. This amount cannot
be collected from the customers.
(vi) The tax has to be paid on quarterly basis. Such
taxpayer does not have to maintain elaborate
accounts and records and instead of two monthly
statements and a return (which a normal taxpayer
Šƒ•–‘ƤŽ‡—†‡”
ȌǡŠ‡Šƒ•–‘ƤŽ‡ƒ•‹’Ž‡“—ƒ”–‡”Ž› 
Ǧ͕ȋ•—’’Ž›†‡–ƒ‹Ž•Ȍ–‘Ƥˆ–›”—’‡‡•’‡”†ƒ›
the consideration is represented by way of interest
or discount, would not become ineligible for the
composition scheme. Further, for computing the
aggregate turnover for eligibility for the scheme,the
turnover of exempted services, including services
by way of extending deposits, loans or advances in
so far as the consideration is represented by way of
interest or discount, supplied by a taxpayer will not be
included. This has been implemented vide issuance of
Order No. 01/2017-Central Tax dated 13.10.2017.
(xiv) The GST Council, in its 25th meeting held on
18.01.2018, reduced the amount of late fee payable
late fee by any registered person for failure to furnish
return in FORM GSTR-04.
(vii) A taxable person opting for the scheme has to
issue bill of supply as he is not eligible to issue taxable
invoice under GST. He has to mention the words
“composition taxable person, not eligible to collect
tax on supplies” at the top of every bill of supply
issued by him
As per the recent amendment in the CGST Act vide the CGST
(Amendment) Act, 2018 following changes have come in
”‡•’‡…–‘ˆ…‘’‘•‹–‹‘•…Š‡‡ǡŠ‘™‡˜‡”ǡ–Š‡‘–‹Ƥ…ƒ–‹‘
for date of implementation of the amendment Act is yet
to be issued.
(i) Government empowered to enhance upper limit for
…‘’‘•‹–‹‘•…Š‡‡–‘•Ǥ͙Ǥ͝…”‘”‡„›‘–‹Ƥ…ƒ–‹‘
(i) A person who opts to pay tax under composition
scheme may supply services, of value not exceeding ten
per cent of turnover in a State or Union territory in the
’”‡…‡†‹‰Ƥƒ…‹ƒŽ›‡ƒ”‘”Ƥ˜‡ŽƒŠ”—’‡‡•ǡ™Š‹…Š‡˜‡”‹•
higher.
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ƒ†–™‡–›”—’‡‡•’‡”†ƒ›ˆ‘”ƤŽ‡”•Ǥ
(xv) The GST Council, in its 25th meeting held on
18.01.2018, allowed taxable persons who have
obtained voluntary registration to apply for
cancellation of registration even before the expiry of
‘‡›‡ƒ”ˆ”‘–Š‡‡ơ‡…–‹˜‡†ƒ–‡‘ˆ”‡‰‹•–”ƒ–‹‘Ǥ
(xvi) The GST Council meeting in its 28th meeting held
on 21st July, 2018 recommended certain amendments
to be carried out in the CGST Act, 2017 and the IGST
Act, 2017, which are trade friendly measures slated
–‘ „‡‡Ƥ– –Š‡  •‡…–‘”Ǥ Š‡ †‡–ƒ‹Ž• ‘ˆ ƒŒ‘”
ƒ‡†‡–•™Š‹…Šƒ”‡„‡‡Ƥ…‹ƒŽ–‘–Š‡•‡…–‘”
are as below:
(a) the upper limit of turnover for opting for
composition scheme would be increased from Rs. 1
crore to Rs. 1.5 crore. Further, composition dealers
would be allowed to supply services, for upto a
value not exceeding 10% of turnover in the preceding
Ƥƒ…‹ƒŽ›‡ƒ”‘”•Ǥ͙ŽƒŠ•ǡ™Š‹…Š‡˜‡”‹•Š‹‰Š‡”Ǥ
(b) provisions of reverse charge mechanism under
sub-section (4) of section 9 of the CGST Act, 2017
and sub-section (4) of section 5 of the IGST Act, 2017
(ix) Registered persons making supply of goods are
required to make payment of tax at the time of the
issuance of invoice and not at the time when advances
are received. This has been implemented vide issuance
‘ˆ ‘–‹Ƥ…ƒ–‹‘ ‘Ǥ ͚͚Ȁ͖͔͕͛ Ȃ ‡–”ƒŽ ƒš †ƒ–‡† ͕͙–Š
November, 2017
(x) The GST Council, in its 23rd meeting held on
10.11.2017, decided that taxpayers having annual
turnover of up to Rs.1.5 crore in the previous year
™‘—Ž† Šƒ˜‡ –Š‡ ‘’–‹‘ –‘ ƤŽ‡ “—ƒ”–‡”Ž› ”‡–—”•Ǥ Š‹•
Šƒ• „‡‡ ‹’Ž‡‡–‡† ˜‹†‡ ‹••—ƒ…‡ ‘ˆ ‘–‹Ƥ…ƒ–‹‘
No. 57/2017 – Central Tax 15th November, 2017.
(xi) The GST Council, in its 23rd meeting held on
10.11.2017, reduced the amount of late fee payable for
†‡Žƒ›‡†ƤŽ‹‰‘ˆ”‡–—”‹ 
Ǧ͗ˆ”‘•͖͔͔
’‡”†ƒ›ˆ‘”†‡Žƒ›‡†ƤŽ‹‰Ǥ‹†‡‘–‹Ƥ…ƒ–‹‘‘Ǥ͚͘Ȁ͖͔͕͛
– Central Tax 15th November, 2017, a taxpayer whose
tax liability for the month is ‘Nil’, is liable to pay late
fee of Rs.20/- per day (Rs.10/- per day each under CGST
& SGST Acts) subject to maximum of Rs.5000/- each
under Act from October, 2017 onwards. In all other
cases, the amount of late fee payable for delayed
ƤŽ‹‰‘ˆ”‡–—”‹ 
Ǧ͗„›‘–Š‡”–ƒš’ƒ›‡”• ’ƒ”–‹…—Žƒ”•Ǥ ‘™‡˜‡”ǡ –Š‡”‡ ‹• ‘ •’‡…‹Ƥ… ˆ‘”ƒ–
has been reduced to Rs. 50/- per day (Rs. 25/- per day
each under CGST & SGST Acts) subject to maximum
Rs.5000/- each under Act from October, 2017.
(xii) The uniform rate of tax @1% (0.5% under the CGST
Act and 0.5% under the respective SGST Act) is payable
under the composition scheme for manufacturers
ƒ† –”ƒ†‡”• ™‹–Š ‡ơ‡…– ˆ”‘ ͔͕•–
ƒ—ƒ”›ǡ ͖͔͕͜Ǥ
This has been implemented vide issuance of
‘–‹Ƥ…ƒ–‹‘‘Ǥ͕Ȁ͖͔͕͜Ǧ ‡–”ƒŽ ƒš †ƒ–‡† ͕•–
ƒ—ƒ”›ǡ
2018. For restaurant services, the rate continues to be
5 per cent.
(xiii) A person eligible for composition scheme also
supplying exempt services including services by way
of extending deposits, loans or advances in so far as
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Input tax credit:In the GST regime, a registered person
is entitled to take credit of input tax charged on any
supply of goods or services or both to him which
are used or intended to be used in the course or
furtherance of his business, subject to the provisions
of section 17(5) of the CGST Act.
There are some special provisions for availability of
credit in special circumstances like new registration,
shifting from composition levy to normal levy and vice
versa, exempted supplies becoming taxable and vice
versa, etc. This helps the MSMEs whenever they shift
from composition or exempted category.
Tax invoice in GST:
GST act provides for issuance of tax invoice within
prescribed period (i.e. before removal of goods for
supply in case of supply of goods and upto a maximum
of 30 days from the date of provision of service, in
case of supply of services) showing the prescribed
prescribed as such for a tax invoice.
In case of supply of goods, the tax invoice has to be
prepared in triplicate (original for buyer, duplicate for
transporter and triplicate for supplier); whereas in case
of service, the invoice has to be prepared in duplicate
(original for buyer and duplicate for supplier).
Special invoice provisions for MSME Sector:
The HSN code required to be mentioned in tax invoice
has been done away for taxpayers upto annual
turnover of upto Rs. 1.5 crores. Further, taxpayers
having annual turnover between Rs. 1.5 Crore to Rs.
͙…”‘”‡•ƒ›‡–‹‘Ƥ”•––™‘†‹‰‹–•‘ˆ…‘†‡‹
their invoices and taxpayers having annual turnover
5
above Rs. 5 crores need to mention full 4 digit HSN
code in their invoices.
š‡’–‹‘ˆ”‘…‘’—Ž•‘”›ƒ—†‹–„›ˆ‘”
Sector:
In GST regime, every registered person whose turnover
†—”‹‰ƒƤƒ…‹ƒŽ›‡ƒ”‡š…‡‡†•–Š‡’”‡•…”‹„‡†Ž‹‹–‹•
required to get his accounts audited by a chartered
accountant or a cost accountant. As a trade facilitation
‡ƒ•—”‡ǡ ‰‘˜‡”‡– Šƒ• ‘–‹Ƥ‡† –Šƒ– ”‡‰‹•–‡”‡†
–—”‘˜‡”‹–Š‡’”‡…‡†‹‰Ƥƒ…‹ƒŽ›‡ƒ”ǡ‘”•Ǥ͙ŽƒŠ•ǡ
whichever is higher. This will make a large number of
MSMEs eligible for the composition scheme.
(iv) Levy of GST on reverse charge mechanism on
receipt of supplies from unregistered suppliers,
–‘ „‡ ƒ’’Ž‹…ƒ„Ž‡ –‘ ‘Ž› •’‡…‹Ƥ‡† ‰‘‘†• ‹ …ƒ•‡ ‘ˆ
…‡”–ƒ‹ ‘–‹Ƥ‡†…Žƒ••‡• ‘ˆ ”‡‰‹•–‡”‡† ’‡”•‘•ǡ ‘ –Š‡
recommendations of the GST Council
persons having annual turnover upto Rs. two crores
are exempted from getting their accounts audited by
a chartered accountant or a cost accountant.
Returns in GST:
GST Act has provided the manner and time of furnishing
˜‹†‡‘–‹Ƥ…ƒ–‹‘‘Ǥ͔͜Ȁ͖͔͕͛Ǧ
of the details of outward supplies by a registered
person, other than certain categories of registered
person and manner and time of communication of
these details to the corresponding recipients. The
act also has provided for manner and time period for
”‡…–‹Ƥ…ƒ–‹‘‘ˆ‡””‘”•‘”‘‹••‹‘ƒ†’ƒ›‡–‘ˆ–ƒš
and interest, if any.
š‹•–‹‰•›•–‡‘ˆ”‡–—”ƤŽ‹‰’”‘…‡••ǣ
All eligible registered persons need to furnish
electronically, in FORMGSTR-1, the details of outward
•—’’Ž‹‡•‘ˆ‰‘‘†•‘”•‡”˜‹…‡•‘”„‘–Š‡ơ‡…–‡††—”‹‰
a tax period on or before the tenth day of succeeding
month.
Similarly, all eligible registered persons are required
to furnish electronically, in FORMGSTR-3B, a summary
return of liabilities, input tax credit and payment of tax
pertaining to the month on or before the twentieth
day of succeeding month.
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ȋ˜Ȍ ‹Ž‹‰‘ˆ”‡–—”•–‘„‡•‹’Ž‹Ƥ‡†™‹–Š‘‡•–‡’
process.
(vi) Service providers making inter-State supplies
whose aggregate annual turnover does not exceed Rs.
20 lakhs have been exempted from the requirement
‘ˆ”‡‰‹•–”ƒ–‹‘—†‡”
Integrated Tax, dated 14.09.2017
(vii) Extending the Advance Authorization (AA) /
Export Promotion Capital Goods (EPCG) / 100% Export
Oriented Units (EOU) schemes to sourcing inputs etc.
from abroad as well as domestically. Holders of AA /
EPCG and EOUs are not required to pay IGST, Cess etc.
on imports. Further, domestic supplies to holders of
AA / EPCG and EOUs are treated as deemed exports
under section 147 of CGST/SGST Act and refund of tax
paid on such supplies is given to either the supplier or
–Š‡”‡…‹’‹‡–˜‹†‡‘–‹Ƥ…ƒ–‹‘‘Ǥ͘͜Ȁ͖͔͕͛Ǧ‡–”ƒŽƒš
dated 18.10.2017.
(viii) Supply of taxable goods by a registered supplier
to a registered recipient for exports shall attract a
total GST rate of 0.1%thereby reducing working capital
blockage for exporters. This provision has been made
‡ơ‡…–‹˜‡ ˜‹†‡ ‘–‹Ƥ…ƒ–‹‘ ‘Ǥ ͔͘Ȁ͖͔͕͛Ǧ‡–”ƒŽ ƒš
ȋƒ–‡Ȍ †ƒ–‡† ͖͗Ǥ͕͔Ǥ͖͔͕͛ ƒ† ‘–‹Ƥ…ƒ–‹‘ ‘Ǥ ͕͘Ȁ͖͔͕͛Ǧ
Integrated Tax (Rate) dated 23.10.2017.
details fed, EWB can be cancelled by generator within
͖͘Š‘—”•’”‘˜‹†‡†‹–Šƒ•‘–„‡˜‡”‹Ƥ‡†‹–”ƒ•‹–Ǥ
(8) EWB can be cancelled by generator within 24
hours; whereas it can be rejected by recipient within 72
hours or the time of delivery of the goods, whichever
is earlier. If recipient does not reject EWB within 72
hours, it would be treated as deemed accepted by
him.
(9) EWB can be generated online on https://www.
ewaybillgst.gov.in. In addition to web, EWB can be
generated by SMS, Android App, APIs, bulk utility, etc.
‡ƒ•—”‡•–ƒ‡ˆ‘”–Š‡•‡…–‘”—†‡”
ǣ
 ”‡–—” ƤŽ‹‰
ƒ”‹‘—•†‡…‹•‹‘•Šƒ˜‡„‡‡–ƒ‡„›–Š‡
‘—…‹Ž process:
‹ ‹–• ˜ƒ”‹‘—• ‡‡–‹‰• ˆ‘” –Š‡ „‡‡Ƥ– ‘ˆ –Š‡ 
sector. The details of such major decisions are as
below:
(i) Goods predominantly manufactured and/or used
in the unorganised MSME sector have been kept at
lower rates or are exempted. For instance, electrical
”‡–—”ƤŽ‹‰’”‘…‡••ƒ”‡‰‹˜‡„‡Ž‘™ǣ
switches and wires, pipeline, plastic products, etc. are
largely produced by MSMEs and they earlier did not
pay Central Excise duty and therefore tax rate on these
have been brought down from 28% to 18%. Similarly,
rates of GST on jute and coir like hand bags, ropes etc,
which are mainly made in the cottage sector, have
been reduced from 12 to 5%. Rate on Fishing hooks
Žƒ”‰‡Ž› —•‡† „› –Š‡ Ƥ•Š‡”ƒ Ȃ –Š‡ ‹†—•–”› „‡‹‰
 …–ǡ ͖͔͕͛ǡ •ŠƒŽŽ ƤŽ‡ ‘‡ ‘–ŠŽ›
A person opting to pay tax under composition
levy scheme is required to furnish electronically, in
FORMGSTR-4, a quarterly return, of turnover in the
State or Union Territory, inward supplies of goods
or services or both, tax payable and tax paid within
eighteen days after the end of such quarter.
’‡…‹ƒŽ”‡–—”ƤŽ‹‰’”‘˜‹•‹‘•ˆ‘”‡…–‘”ǣ
As a trade facilitation measure, the government has
‘–‹Ƥ‡† –Šƒ– ƒŽŽ ‡Ž‹‰‹„Ž‡ ”‡‰‹•–‡”‡† ’‡”•‘ Šƒ˜‹‰
ƒ—ƒŽ–—”‘˜‡”—’–‘•Ǥ͕Ǥ͙…”‘”‡•ƒ›‘’–ˆ‘”ƤŽ‹‰
of quarterly return, in FORMGSTR-1 (i.e.the details
of outward supplies of goods or services or both
‡ơ‡…–‡††—”‹‰–Š‡“—ƒ”–‡”Ȍ
”‘’‘•‡† •›•–‡ ‘ˆ •‹’Ž‹Ƥ‡†
GST Council has recently approved the new return
formats and associated changes in law. The major
…Šƒ‰‡ ‹• –Š‡ ‘’–‹‘ ‘ˆ ƤŽ‹‰ “—ƒ”–‡”Ž› ”‡–—” ™‹–Š
‘–ŠŽ›’ƒ›‡–‘ˆ–ƒš‹ƒ•‹’Ž‹Ƥ‡†”‡–—”ˆ‘”ƒ–
by the small tax payers. The salient features of
’”‘’‘•‡†
(1) Monthly Return and due-date: All taxpayers
excluding a few exceptions like small taxpayers,
composition dealer, Input Service Distributor (ISD),
Non-resident registered person, persons liable to
deduct tax at source under section 51 of CGST Act,
2017, persons liable to collect tax at source under
•‡…–‹‘ ͙͖ ‘ˆ 
Žƒ”‰‡Ž› Žƒ„‘—” ‹–‡•‹˜‡ ™‹–Š ‹•‹‰‹Ƥ…ƒ–  Šƒ˜‡
been reduced from 12 to 5%.
(ii) Upper limit of turnover for opting for composition
scheme to be raised from Rs. 1 crore to Rs. 1.5 crore.
(iii) Composition dealers to be allowed to supply
”‡–—”Ǥ ‡–—” ƤŽ‹‰ †ƒ–‡• •ŠƒŽŽ „‡ •–ƒ‰‰‡”‡† „ƒ•‡†
on the turnover of the taxpayer. The due date for
ƤŽ‹‰‘ˆ”‡–—”„›ƒŽƒ”‰‡–ƒš’ƒ›‡”•ŠƒŽŽ„‡͖͔–Š‘ˆ–Š‡
next month.
2. (i) Nil return: Taxpayers who have no purchases,
no output tax liability and no input tax credit to avail
services, for upto a value not exceeding 10% of ‹ƒ› “—ƒ”–‡” ‘ˆ –Š‡ Ƥƒ…‹ƒŽ ›‡ƒ” •ŠƒŽŽƤŽ‡ ‘‡

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”‡–—”ˆ‘”–Š‡‡–‹”‡“—ƒ”–‡”Ǥ ƒ…‹Ž‹–›ˆ‘”ƤŽ‹‰“—ƒ”–‡”Ž›
return shall also be available throughan SMS.
(ii) Small taxpayers: Taxpayers who have a turnover up
–‘•Ǥ͙”Ǥ‹–Š‡Žƒ•–Ƥƒ…‹ƒŽ›‡ƒ”•ŠƒŽŽ„‡…‘•‹†‡”‡†
•ƒŽŽǤŠ‡•‡•ƒŽŽ–ƒš’ƒ›‡”••ŠƒŽŽŠƒ˜‡ˆƒ…‹Ž‹–›–‘ƤŽ‡
quarterly return with monthly payment of taxes on
self-declaration basis. However, the facility would
„‡‘’–‹‘ƒŽƒ†•ƒŽŽ–ƒš’ƒ›‡”…ƒƒŽ•‘ƤŽ‡‘–ŠŽ›
return like a large taxpayer.
Ǧ‹ŽŽ‹
ǣ (iv) Unregistered supplier to unregistered recipient:
GST Electronic Way Bill i.e. E-Way Bill (EWB) has been
implemented in India from 1st April 2018 for inter-state
movement of goods and from 16th June 2018, all 36
States / Union Territories have made EWB applicable
for for Intra-State movement of goods.
The salient features of GST E-Way Bill System are:
(1) EWB is a document required for movement of
goods from one place to another. The movement may
be either (i) from supplier to recipientand vice versa;
or (ii) from manufacturer to job worker and vice versa;
or (iii) between two premises of same businessman;
or (iv) for any other purpose.
(2) EWB is to be generated by every registered
person causing movement of goods of consignment
value (inclusive of GST) exceeding Rs. 50,000/-.
For consignments even below Rs. 50,000/-, EWB is
mandatory in case of inter– state movement of (i)
goods being sent for job work; and (ii) handicraft
goods..
(3) There can be four situations for movement of
goods:
(i) Registered supplier to registered recipient: EWB
may be generated by either of them depending on
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terms of delivery i.e. the person causing movement of
goods is responsible for EWB generation.
(ii) Registered supplier to unregistered recipient: EWB
to be generated mandatorily by registered supplier.
(iii) Unregistered supplier to registered recipient: In
such supplies, the movement of goods is deemed to
have been caused by registered recipient and he is
required to generate EWB
In such transactions, though EWB Is not mandatory,
it can be generated by either of them on voluntary
basis.
(4) Normally EWB is not required for exempted goods.
In addition, there are few items for which EWB is not
required as detailed in Annexure to rule 138(14) of the
CGST Rules.
(5) No distance exemption clause in EWB provisions.
Any direct movement of goods between supplier
and recipient warrants EWB, irrespective of distance.
However, for Intra-Sate movement of goods
from supplier’s premises to transporter and from
transporter’s premises to recipient, part B is not
mandatory, if the said distance is below 50 km.
ȋ͚ȌƒŽ‹†‹–›’‡”‹‘†ǣ ‘”‘…ƒ”‰‘ǡ–Š‡˜ƒŽ‹†‹–›‹•
one day for every 100 km. or part thereof. However,
in case of ODC cargo, one day is given for every 20 km.
‘”’ƒ”––Š‡”‡‘ˆǤƒŽ‹†‹–›•–ƒ”–•ˆ”‘–Š‡–‹‡‘ˆ’ƒ”–
—’†ƒ–‹‘ȋ‹Ǥ‡Ǥ˜‡Š‹…Ž‡—„‡”‡–”›Ȍƒ†Ƥ”•–†ƒ›Žƒ•–•
till 12 midnight of next day.
(7) No changes can be done in part A (i.e. consignment
details) of EWB once generated. However, part B (i.e.
vehicle details) can be updated any number of times
within validity period. However, in case of wrong